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7 Factors That Can Affect the Value of Your Certified Coins

7 Significant Factors That Can Affect the Value of Your Certified Coins

Some might say, “Not all certified coins are created equal.” In fact, we’ve written a few articles over the years addressing certified coins, including when to submit your coins for certification and which third-party grading services (TPGS) are best. However, we’ve yet to address specific factors that can affect the value of your certified coins. On the surface, it would appear as though all certified coins should trade at the same price. That would seem logical, right? However, you might be surprised to find out that’s not the case.

Even the same exact coin that has been certified by the same TPGS can potentially have substantially different prices based on a few factors. That’s why this article exists so we can shed some light on what factors to be aware of, so you are better equipped when you’re investing in rare coins or to help set realistic expectations when selling a certified coin collection.

 

FACTOR #1: The Third-Party Grading Service

We’ve discussed in the past the importance of acquiring coins that have been certified by well-known and respected TPGS, but it bears repeating here.

As a reminder, countless grading services have come and gone over the years, but only a few have stood the test of time. Longevity is very important as it gives a clear indicator that their grading practices are strict and that they practice consistent grading standards. Most of the companies that are now defunct failed to accurately grade coins or apply the same standard to all the coins they certified.

While other grading services may have existed prior to ANACS, they were the first recognized third-party grading service to enter the market. They began offering grading services in 1979 and still exist today but have taken a back seat to PCGS and NGC, the two leading third-party grading services. PCGS began in 1986 and NGC the subsequent year. ICG, a second-tier grading service, began offering grading services in 1998.

At the time of this writing, these are the only active third-party authentication companies that are recognized by professionals throughout the coin industry.

 

FACTOR #2: The Generation of the Holder

As you can probably imagine, the leading TPGS have gone through a few

NGC 1st Generation Coin Holder
NGC 1st Gen Holder

changes over the years with respect to their coin holders and grading standards. In fact, some collectors place an additional premium on some of the first holders introduced by the grading services. These holders, frequently referred to as first generation holders, are oftentimes in higher demand from collectors and dealers.

The first holder introduced by PCGS was a bit archaic. It was small (a decent bit smaller than the standard size today) and had a light green label, which looked like it was printed on a typewriter and wasn’t designed to securely hold the coin in place like present-day holders. If you shake one of these holders, you’ll likely hear a rattling sound. Not surprisingly, these holders are affectionately known as “rattlers” and are quite popular with collectors.

When you have a first-generation holder, not only are you owning a piece of third-party grading history with a retro, throwback or first-generation holder, but many collectors, and even some dealers, believe that the grading standards were stricter when PCGS first began. For example, an MS63 coin when the company first started in 1986 may be closer to an MS64 coin using today’s standards. That’s not to say the grading standards have become lax. They have simply become more consistent across the board and are more in line with the Sheldon 70-point grading scale.

PCGS 1st Gen Coin Holder
PCGS 1st Gen Coin Holder

NGC, the other top-tier TPGS, has a similar holder that tends to be in high demand as well. Their first-generation holder is known as an “Old Fatty Holder.” This refers to the thickness of the holder, which is clearly thicker than the holders used today. While the “old fatty holder” looks like the holders that NGC uses today, its design and label are a bit more basic.

Generally speaking, PCGS’ rattler holders are a bit more popular and in demand than the “old fatty

holders” from NGC, but you can’t go wrong with either. Depending on the coin, it may be possible to sell coins encapsulated in these holders for slightly more than coins secured in current generation holders.

 

FACTOR #3: Toning/Tarnishing

It’s always nice to have a high-grade coin from one of the four grading services mentioned above, but aesthetics also come into play. Most of the remaining factors that we’ll cover have to do with the aesthetics of the coin, but we’ll begin with one of the more obvious or noticeable factors, which is toning, tarnishing, or the lack thereof.

When a silver coin is first produced by the U.S. Mint, it has a nice white frosty or snowy appearance. As time goes on or as a coin is handled or exposed to the elements, it tends to tone or tarnish. Coins with evidence of toning or tarnishing tend to be less popular and trade at lower prices than “white” coins. As a coin dealer that is a member of the largest coin dealer networks in the industry, we can tell you that most other dealers are in the market for “white coins.”

Rainbow Morgan Silver Dollar
Rainbow Toning

This doesn’t mean that there’s not a market for coins that have toning; only that an offer on coins with toning may be slightly less than one without toning.

On the other hand, coins that have a “rainbow” or “monster rainbow” appearance can be quite popular and oftentimes sell at a premium; sometimes significantly. These are coins that have attractive toning exhibiting different hues of color, including, but not limited to blue, purple, green, pink and orange.

Because of their popularity, counterfeiters have attempted to recreate this appearance, so we recommend that you only purchase higher-valued rainbow-toned coins that have been certified or professionally graded.

 

FACTOR #4: Red or Brown Spots

Did you know that spots don’t affect the grade of a coin? When a coin is certified by a third-party grading service, their focus is on the extent of contact marks or wear to the coin’s surface. This means that a coin that is unpleasing to the eye, such as those with red or brown spots, can receive the same grade as a spotless coin.gold buffalo copper spot

Coins that are most susceptible to red or brown spots are pre-1933 U.S. gold coins. These coins are 90% gold and 10% copper. Over time, copper spots can manifest themselves on the surface of the coin. The most prevalent copper spots are red, but we regularly see coins with brown spots as well.

A coin with spots doesn’t necessarily mean that it was mishandled. It has more to do with the quality of the gold planchets, the flat disk of metal that makes the coin, that was used by the producers. Even the elements the coin was exposed to over the years, such as high levels of humidity or extreme heat can create unsightly spots.

It’s even possible that a coin that was originally spotless when encased by a third-party grading service may show evidence of spots at some point in the future. In some cases, it’s the luck of the draw.

As with other aesthetic issues, such as toning, you can expect to receive less money for a coin with red or brown spots. Many collectors of pre-1933 U.S. gold coins are extremely particular when it comes to the surface of their coins, so not surprisingly, your local coin dealer will likely offer you a bit of a discounted rate for spotted coins.

 

FACTOR #5: Grease marks or DirtNGC Peace Dollar

Quality control was apparently a bit of an issue with the U.S. Mint in the 1800’s and early 1900’s. In fact, some coins, most notably U.S. gold coins, will have evidence of grease stains/marks or dirt. This had to do with the die used, which was often overused, insufficiently cleaned or not changed out as frequently as it should have been.

While dirt or grease stains don’t technically affect the grade of the coins (as you’ll remember, grades have to do with the level of wear), they can affect the aesthetics and subsequently the value. Grease stains manifest as small black or dark brown marks or streaks (not necessarily spots), while dirt is typically found in the recesses of the coin.

When a coin dealer pulls out a loupe, they’re looking for evidence of these issues, which may affect the value.

Demand, and value for these coins are on par with coins that have spots. Again, collectors, especially those individuals who are potentially looking to spend thousands of dollars, typically want a coin that is nice and clean without any noticeable issues to the naked eye.

 

FACTOR #6: The Surfaces of the Coin

Our focus thus far has been on the aesthetics of the coin, and we’ll wrap up our discussion on aesthetics by addressing one last issue, which also involves the surface of the coin, but from a slightly different perspective.

As we mentioned above, when coins are originally produced by the U.S. Mint, they have a frosty or snowy appearance, which is commonly referred to as mint luster.

Coins with full and complete mint luster with original surfaces and without the aesthetic issues noted above are in the greatest demand.

Dipped Morgan Silver Dollar
A “dipped” coin

The original surface of a coin may be affected by dipping it in a solution and still receive a straight grade from a TPGS. A straight grade is a letter and number grade printed on the coin holder label without any qualifiers.

Coins that have issues, most notably, those that have been altered, typically receive a detail grade. Coin collectors and dealers prefer to purchase coins with an actual number grade as opposed to a detail grade.

The reason why coins may have been dipped in a solution is to remove dirt, toning, tarnishing or spots. While it’s possible that the intended outcome was reached, unfortunately, coins that are dipped never exhibit the same type of original mint luster as a coin that hasn’t been dipped. A coin dealer may refer to their desire to purchase coins with the “original skin” or “original surfaces.”

In fact, high-end collectors may insist on these coins, as they may consider a dipped coin to be an altered coin and unworthy of the grade assessed by the grading surface.

Dipping coins affects the surface of all coins, including gold coins. On occasion, gold coins that are dipped show almost a shiny surface or toning, which isn’t typical for gold coins. A common term for these coins in the industry is a “Euro” look, which may be stylish when you’re across the pond, but certainly isn’t seen in the same light here.

 

FACTOR #7: Condition of the Holder

We’ll end this discussion on lucky #7 by discussing the condition of the holder itself. While this doesn’t appear as though it should be a contributing factor, it is and has to do with how the coin appears while in hand. A common term used in the industry is how the coin faces up.

Coins that are in poor quality, cracked, scruffy, cloudy or scratched holders tend to sell at lower rates than coins in nice clean holders. It would be equivalent to rehabbing the interior of the home and leaving the outside looking run down.

Damaged Hologram Coin Holder
Damaged Hologram

Doing so would make for a hard sell. Same when a collector is looking to invest hundreds or even thousands of dollars, they want a coin, including the holder, that is pleasing to the eye.

Granted, it’s possible to have a coin “reholdered” by one of the TPGS, but this takes time and money. The more valuable the coin, the higher the cost.

Not to mention, at the time of this writing, all third-party grading services are experiencing long delays as a result of Covid-19, so it could take months to receive a coin back that you’ve submitted to be reholdered.

While the rare coin market isn’t as volatile as the stock market, it’s not uncommon for the conditions to change over a period of a few months, which means the demand, marketability, and value of your coin could be significantly less once you receive it back from the grading service.

This is an incentive to properly care for your certified coins to ensure the holders aren’t negatively affected. We recommend storing your coins in a PCGS or NGC coin holder, which provides separation between the coins and prevents any surface issues to the holders.

 

Summary

Okay, so we’ve addressed seven issues that can negatively impact the value of your certified coins and hope it helps when you’re ready to purchase your first certified coin or sell your last. First and foremost, we recommend that you only purchase coins from one of the leading third-party grading companies that we discussed above; preferably NGC or PCGS.

The holder in which the coins were slabbed can also affect the value of your coin. PCGS rattler and NGC old fatty holders have the potential for additional value.

We also discussed the importance of the aesthetics of a coin, such as toning and tarnishing. One exception is if your coin exhibits an attractive rainbow or monster rainbow toning, it can actually enhance the value of the coin. Other negative factors that could affect the aesthetics include red and brown spots, dirt, grease stains, and the surfaces of the coins.

If buying certified coins, be on the lookout and try to avoid coins with these issues. If selling certified coins, expect to receive less for these types of coins. Finally, it’s important to maintain the condition of the holder. Coins in holders that are damaged are more difficult for a coin dealer to sell, which may require having the coin “reholdered” costing time and money.

We hope you found this article not only interesting, but also helpful, and welcome you to contact the experts at Atlanta Gold & Coin if you’re in the market to purchase certified coins or sell your certified coin collection.

 

Happy Treasure Hunting!

Atlanta Gold and Coin Buyers

Tony Davis
Tony Davis